75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
SA to SB 628
LC 2676/SB 628-6
SENATE AMENDMENTS TO
SENATE BILL 628
By COMMITTEE ON CONSUMER PROTECTION AND PUBLIC AFFAIRS
May 4
On page 1 of the printed bill, line 2, after 'ORS 86.740 '
insert 'and 86.742'.
Delete lines 5 through 30 and delete pages 2 through 5 and
insert:
' { + SECTION 1. + } ORS 86.740 is amended to read:
' 86.740. (1) { + (a) + } Subsequent to recording notice of
default as provided in ORS 86.735 and at least 120 days before
the day the trustee conducts the sale, notice of the sale
{ - shall - } { + must + } be served { - pursuant to - }
{ + in accordance with + } ORCP 7 D(2) and 7 D(3) or mailed by
both first class and certified mail with return receipt requested
{ - , - } { + .
' (b) Except as provided in subsection (5) of this section, if
the sale is for the purpose of foreclosing a residential trust
deed:
' (A) The notice described in paragraph (a) of this subsection
must be served or mailed as provided in paragraph (a) of this
subsection at least 150 days before the date of the sale; and
' (B) In addition to the notice described in paragraph (a) of
this subsection, the notice described in section 4 of this 2009
Act must also be served or mailed as provided in paragraph (a) of
this subsection at least 150 days before the date of the sale.
' (2) The notices described in subsection (1) of this section
must be served or mailed + }to the last-known address of the
following persons or { - their - } { + the + } legal
representatives { + of the persons + }, if any:
' (a) The grantor in the trust deed.
' (b) { - Any - } { + A + } successor in interest to the
grantor whose interest appears of record, or of whose interest
the trustee or the beneficiary has actual notice.
' (c) { - Any - } { + A + } person, including the
Department of Revenue or
{ - any other - } { + another + } state agency,
{ - having - } { + that has + } a lien or interest subsequent
to the trust deed if the lien or interest appears of record or
the beneficiary has actual notice of the lien or interest.
' (d) { - Any - } { + A + } person { - requesting - }
{ + that requests + } notice as provided in ORS 86.785.
' { - (2) - } { + (3) + } A notice served by mail under
subsection (1) of this section is effective when the notice is
mailed. { + On or before the date the trustee conducts the sale,
the trustee shall file for recording in the official record of
the county or counties in which the property described in the
trust deed is situated an affidavit of mailing with respect to
the notices required under subsection (1) of this section. + }
' { - (3)(a) - } { + (4)(a) + } The disability, insanity or
death of { - any - } { + a + } person { - to whom - } { +
entitled to + } notice of sale { - must be given - } under this
section does not delay or impair in any way the trustee's right
under a trust deed to foreclose under the deed. If the
disability, insanity or death occurs { - prior to the recording
of - } { + before the + } notice of default { + is
recorded + }, the notice { - shall - } { + must + } be given
instead to the guardian, the conservator of the { +
person's + } estate { - of the person - } or the { +
person's + } administrator or personal representative { + , as
appropriate, + } { - of the person, as the case may be, - } in
the manner and by the time set forth in this section.
' (b) If the disability, insanity or death of { - any - }
{ + a + } person
{ - to whom - } { + entitled to + } notice of sale { - must
be given - } under this section occurs on or after the
{ - recording of - } notice of default { + is recorded + },
the trustee shall, if and when the trustee has knowledge of the
disability, insanity or death, promptly give the guardian, { +
the + } conservator of the estate or the administrator or
personal representative, as { - the case may be - } { +
appropriate + }, the notice provided in ORS 86.745. { - This
notice shall - } { + The notice must + } be given by first
class and certified mail with return receipt requested, to the
last-known address of the guardian, conservator or administrator
or personal representative.
' (c) { - In the event - } { + If + } there is no
administrator or personal representative of the estate of the
person { + entitled + } to { - whom - } notice of sale
{ - must be given - } under this section, the notice may be
given instead to the heirs at law or devisees of the deceased
person in the manner and by the time set forth in this section.
{ + ' (5) The requirement to mail or serve a notice described
in subsection (1)(b) of this section does not apply if the
property subject to the trustee's sale is property secured by a
mortgage that a government agency holds for a loan the government
agency funded through a government program. + }
' { + SECTION 2. + } ORS 86.742 is amended to read:
' 86.742. (1) If the trustee fails to give notice of the sale
to { - any - } { + a + } person entitled to notice under ORS
86.740 { - (1)(c), - } { + (2)(c) + } and { - such - }
{ + the + } person did not have actual notice of the sale at
least 25 days { - prior to - } { + before + } the date the
trustee conducted the sale, { - such - } { + the + } omitted
person { - shall have - } { + has + } the same rights
possessed by the holder of a junior lien or interest who was
omitted as a party defendant in a judicial foreclosure proceeding
{ - , - } and the purchaser at the trustee's sale or the
purchaser's heirs, assigns or transferees { - , shall - } have
the same rights { - possessed by - } a purchaser at a
sheriff's sale { + possesses + } following a judicial
foreclosure.
' (2) The omitted person may also commence an action against
the trustee in the circuit court in the county where the real
property is located. In an action against the trustee, the
omitted person { - shall be - } { + is + } entitled to
damages upon proof that:
' (a) The trustee did not give notice of the sale to the
omitted person in the manner required by ORS 86.740
{ - (1)(c) - } { + (2)(c) + } and 86.750;
' (b) A search of the record under the { + grantor's + } name
{ - of the grantor - } as { - it - } { + the name + }
appears on the trust deed, or the name of the grantor's successor
in interest, would have revealed the omitted person's interest;
' (c) The omitted person could and would have cured the default
under ORS 86.753; and
' (d) The omitted person sustained actual damages as a result
of { - such - } { + the + } person's loss of the opportunity
to cure the default under ORS 86.753 (1).
' (3) In an action against the trustee under subsection (2) of
this section, { - any - } { + a + } defendant or third party
defendant may move for dismissal on the ground that the omitted
person would not or could not have cured the default and
reinstated the trust deed if the omitted person had received the
notice required by ORS 86.740 { - (1)(c) - } { + (2)(c) + }.
The court shall hold a hearing on { - such - } { + the + }
motion { - prior to any - } { + before a + } hearing on
{ - any - } { + a + } motion for summary judgment, and
{ - prior to - } { + before + } trial of the action. The court
shall deny the motion only if the omitted person produces
affidavits or other evidence sufficient for a reasonable jury to
find, applying a standard of clear and convincing evidence, that
the omitted person had the financial ability to cure the default
under ORS 86.753 prior to the date of the trustee's sale, and
that the omitted person would have done so had the omitted person
received the notice required by ORS 86.740 { - (1)(c) - } { +
(2)(c) + }. If the court grants the motion to dismiss { + , + }
{ - it - } { + the court + } shall award attorney fees
pursuant to subsection (5) of this section.
' (4) In { - any - } { + an + } action against the trustee
or { - any other - } { + another + } party under this
section { + , + } the omitted person shall plead that the omitted
person did not have actual knowledge of the sale at least 25 days
{ - prior to - } { + before + } the date the trustee conducted
the sale, but thereafter the defendant { - shall have - } { +
has + } the burden of proving that the omitted person did have
{ - such - } notice.
' (5) In { - all - } suits brought under this section, the
applicable court may, upon entering judgment, allow to the
prevailing party as a part of the costs a reasonable amount for
attorney fees at trial and on appeal.
' (6) The remedies described in subsections (1) to (5) of this
section { - shall be - } { + are + } the sole remedies
available to a person entitled to notice of foreclosure by
advertisement and sale under ORS 86.740 { - (1)(c), - } { +
(2)(c) + } who failed to receive { - such - } notice.
{ - Such a - } { + The + } person's failure to redeem or to
commence an action against the trustee within five years
{ - of - } { + after + } the date of a trustee's sale under
ORS 86.755 { - shall bar any - } { + bars an + } action under
this section or { - any - } { + under + } other applicable
law.
' { + SECTION 3. + } { + Sections 4 to 9 of this 2009 Act
are added to and made a part of ORS 86.705 to 86.795. + }
' { + SECTION 4. + } { + A notice that states that a grantor
has the right to participate in mediation before a trustee's sale
to foreclose a residential trust deed must conform to
specifications the Director of the Department of Consumer and
Business Services sets by rule. The notice at a minimum must:
' (1) Set forth the name and address for the grantor named in
the residential trust deed;
' (2) Itemize the amount in default and past due on the
obligation secured by the residential trust deed, the amount that
must be paid to cure the default and all associated costs and
fees;
' (3) Provide the address, telephone number or other contact
information for:
' (a) The trustee, beneficiary or agent of the trustee or
beneficiary that is authorized to negotiate on the trustee's or
beneficiary's behalf;
' (b) The Oregon State Bar's Lawyer Referral Service; and
' (c) Housing counselors that are approved by the United States
Department of Housing and Urban Development in accordance with
the department's Housing Counseling Program Handbook 7610.1 and
that provide counseling services at no charge to the grantor;
' (4) State that the grantor has the right to request and
participate in mediation with the beneficiary in the residential
trust deed for the purpose of avoiding a trustee's sale of the
property subject to the residential trust deed;
' (5) State that the grantor must contact the beneficiary
within 30 days after the date of the notice to request mediation;
' (6) Provide a telephone number and other contact information
the grantor may use to request mediation with the beneficiary;
' (7) List the documents and other information the grantor must
bring to the mediation;
' (8) List the names, addresses and telephone numbers for three
persons who are qualified under section 7 of this 2009 Act to
provide mediation services either for a fee or at no charge;
' (9) State that the grantor is entitled to be represented at
the mediation by an attorney, by a housing counselor approved by
the United States Department of Housing and Urban Development in
accordance with the department's Housing Counseling Program
Handbook 7610.1 or by another representative; and
' (10) State that the grantor will bear no cost for the
mediation. + }
' { + SECTION 5. + } { + (1) Within 30 days after the date
on which a grantor requests mediation, the beneficiary or an
agent of the beneficiary shall serve the grantor with a second
notice in accordance with ORCP 7 D(2) and 7 D(3) or mail the
notice to the grantor by both first class and certified mail with
return receipt requested. The second notice must:
' (a) Schedule a time and location for the mediation on a date
that is not later than 90 days after the date on which the notice
described in section 4 of this 2009 Act was served or mailed in
accordance with ORS 86.740 (1); and
' (b) Propose a mediator from the list included with the notice
described in section 4 of this 2009 Act.
' (2) If the grantor objects to the beneficiary's proposed
mediator, the beneficiary shall schedule the mediation with a
mediator that the grantor proposes unless the beneficiary objects
to the grantor's proposed mediator. If the grantor and the
beneficiary each object to the other's proposed mediator, the
beneficiary shall schedule the mediation with the remaining
mediator.
' (3) If the grantor and the beneficiary agree upon a schedule
and a mediator, the beneficiary shall send notice of the time and
location of the mediation to the persons identified in ORS 86.740
(2)(c).
' (4) During the period that begins on the date the notice
described in section 4 of this 2009 Act was served or mailed in
accordance with ORS 86.740 (1) and that ends 30 days later, if
the grantor has not contacted the beneficiary to schedule a
mediation, or that ends on the date on which a mediation
scheduled in accordance with this section concludes, a trustee or
the beneficiary may not add fees or charges to the obligation the
grantor owes to the beneficiary. This subsection does not affect:
' (a) Interest charged under the terms of the loan agreement or
other evidence of the obligation; or
' (b) Service fees or charges that the grantor paid as part of
the obligation before the date on which the notice described in
section 4 of this 2009 Act was served or mailed in accordance
with ORS 86.740 (1). + }
' { + SECTION 6. + } { + (1)(a) For the purposes of this
section, the parties to a mediation conducted to avoid a
trustee's sale of real property described in a residential trust
deed are the grantor and the grantor's representative, if any,
and the beneficiary.
' (b) If a grantor is represented, the mediator, the
beneficiary or the grantor may offer a reasonable settlement
proposal to avoid the sale, including a proposal generated by a
loan modification formula described in subsection (2) of this
section.
' (c) If the grantor is not represented, the mediator shall use
a loan modification formula described in subsection (2) of this
section to generate a settlement proposal.
' (2) The mediator, the grantor or the beneficiary may use as a
loan modification formula to generate a settlement proposal:
' (a) An automated loan modification formula developed by the
Federal Deposit Insurance Corporation; or
' (b) A formula that is consistent with the Making Home
Affordable guidelines issued by the United States Department of
the Treasury.
' (3) With the consent of the parties to the mediation, the
mediator may adopt rules to facilitate a settlement and may, with
the parties' consent, have authority to suspend or continue the
mediation.
' (4) If the parties agree to a settlement, the mediator and
the parties shall witness and sign a document that sets forth the
terms of the settlement. The mediator shall provide copies of the
document to the parties and shall report to the Department of
Consumer and Business Services that the parties have reached a
settlement. The beneficiary, within five business days after the
parties have signed a settlement document under this subsection
or before the scheduled date of the trustee's sale, whichever is
earlier, shall instruct the trustee to discontinue the trustee's
sale and shall amend the beneficiary's records to reflect the
modified terms of the obligation that are set forth in the
settlement document.
' (5) If the parties agree to a settlement, the mediator may
also propose a settlement for the holder of a junior lien on the
real property described in the residential trust deed. In making
the proposal, the mediator shall consider whether, given the
market value of the real property and the terms of the parties'
settlement, equity to which the holder's lien may attach remains
in the real property.
' (6) If the parties do not reach a settlement, the mediator
shall write a report that states that the parties have not
reached a settlement and the trustee may proceed with the sale
scheduled according to the notice required under ORS 86.740 (1)
to foreclose a residential trust deed. In the report, the
mediator shall describe the results of the mediation and the
method used to generate a settlement proposal, with specific
reference to the formula the parties used, if the parties used a
formula described in subsection (2) of this section. The mediator
shall provide copies of the report to the parties. + }
' { + SECTION 7. + } { + (1) To qualify as a mediator for
the purposes of the mediation described in section 6 of this 2009
Act, a person must:
' (a) Be trained in how to generate a settlement proposal from
a formula or program described in section 6 (2) of this 2009 Act;
' (b) Be a member of the Oregon State Bar or otherwise
qualified as a mediator under rules the Chief Justice of the
Supreme Court has adopted to qualify court connected mediators;
and
' (c) Provide the person's name and contact information to the
Department of Consumer and Business Services. The department
shall maintain the person on the department's list of qualified
mediators if the person:
' (A) Provides mediation services without charge; or
' (B) Charges not more than $125 per hour for three hours of
mediation services.
' (2) A person may not conduct a mediation described in section
6 of this 2009 Act if the person has a conflict of interest
related to the parties to or to the subject of the mediation that
prevents the person from providing mediation services in an
impartial manner. + }
' { + SECTION 8. + } { + (1) Except as provided in
subsection (2) of this section, the rights of a purchaser at a
trustee's sale and the grantor or an heir, assign or transferee
of the grantor with respect to real property described in a
residential trust deed are the same as the rights accorded under
ORS 86.742 to the purchaser and to a person entitled to notice
under ORS 86.740 (2)(c) if the grantor proves that:
' (a) The trustee did not send the notices required under ORS
86.740 (1) and the grantor did not actually receive notice of the
trustee's sale at least 120 days before the trustee conducts the
sale;
' (b) The beneficiary did not attend a mediation scheduled
under section 5 of this 2009 Act; or
' (c) The beneficiary refused to accept a settlement proposal
that calculations performed in accordance with a formula or
program described in section 6 (2) of this 2009 Act demonstrated
was feasible.
' (2) Subsection (1) of this section does not apply to the
purchaser at the trustee's sale or to the grantor or heir, assign
or transferee of the grantor if the trustee or beneficiary named
in the residential trust deed attests in a signed, sworn
statement filed before the date of the trustee's sale with the
clerk or recorder of deeds in the county in which the real
property described in the residential trust deed is located that:
' (a) The real property was abandoned before the date of the
trustee's sale;
' (b) The grantor voluntarily relinquished the property to the
trustee or beneficiary in return for valuable consideration after
meeting with a housing counselor approved by the United States
Department of Housing and Urban Development in accordance with
the department's Housing Counseling Program Handbook 7610.1;
' (c) The grantor for a period of 90 days or longer has been in
default under the terms of a settlement to which the grantor and
the beneficiary agreed under section 6 of this 2009 Act; or
' (d) The grantor did not request mediation after receiving a
notice under section 4 of this 2009 Act.
' (3) The trustee or beneficiary shall serve the grantor with a
copy of the sworn statement described in subsection (2) of this
section, or mail a copy to the grantor, within three business
days after the trustee files the statement with the county clerk
or recorder of deeds. + }
' { + SECTION 9. + } { + The Director of the Department of
Consumer and Business Services may adopt rules necessary to
administer sections 4 to 7 of this 2009 Act. + }
' { + SECTION 10. + } ORS 86.740, as amended by section 1 of
this 2009 Act, is amended to read:
' 86.740. { - (1)(a) - } { + (1) + } Subsequent to
recording notice of default as provided in ORS 86.735 and at
least 120 days before the day the trustee conducts the sale,
notice of the sale must be served in accordance with ORCP 7 D(2)
and 7 D(3) or mailed by both first class and certified mail with
return receipt requested.
' { - (b) Except as provided in subsection (5) of this
section, if the sale is for the purpose of foreclosing a
residential trust deed: - }
' { - (A) The notice described in paragraph (a) of this
subsection must be served or mailed as provided in paragraph (a)
of this subsection at least 150 days before the date of the sale;
and - }
' { - (B) In addition to the notice described in paragraph (a)
of this subsection, the notice described in section 4 of this
2009 Act must also be served or mailed as provided in paragraph
(a) of this subsection at least 150 days before the date of the
sale. - }
' (2) The { - notices - } { + notice + } described in
subsection (1) of this section must be served or mailed to the
last-known address of the following persons or the legal
representatives of the persons, if any:
' (a) The grantor in the trust deed.
' (b) A successor in interest to the grantor whose interest
appears of record, or of whose interest the trustee or the
beneficiary has actual notice.
' (c) A person, including the Department of Revenue or another
state agency, that has a lien or interest subsequent to the trust
deed if the lien or interest appears of record or the beneficiary
has actual notice of the lien or interest.
' (d) A person that requests notice as provided in ORS 86.785.
' (3) A notice served by mail under subsection (1) of this
section is effective when the notice is mailed. { - On or
before the date the trustee conducts the sale, the trustee shall
file for recording in the official record of the county or
counties in which the property described in the trust deed is
situated an affidavit of mailing with respect to the notices
required under subsection (1) of this section. - }
' (4)(a) The disability, insanity or death of a person entitled
to notice of sale under this section does not delay or impair in
any way the trustee's right under a trust deed to foreclose under
the deed. If the disability, insanity or death occurs before the
notice of default is recorded, the notice must be given instead
to the guardian, the conservator of the person's estate or the
person's administrator or personal representative, as
appropriate, in the manner and by the time set forth in this
section.
' (b) If the disability, insanity or death of a person entitled
to notice of sale under this section occurs on or after the
notice of default is recorded, the trustee shall, if and when the
trustee has knowledge of the disability, insanity or death,
promptly give the guardian, the conservator of the estate or the
administrator or personal representative, as appropriate, the
notice provided in ORS 86.745. The notice must be given by first
class and certified mail with return receipt requested, to the
last-known address of the guardian, conservator or administrator
or personal representative.
' (c) If there is no administrator or personal representative
of the estate of the person entitled to notice of sale under this
section, the notice may be given instead to the heirs at law or
devisees of the deceased person in the manner and by the time set
forth in this section.
' { - (5) The requirement to mail or serve a notice described
in subsection (1)(b) of this section does not apply if the
property subject to the trustee's sale is property secured by a
mortgage that a government agency holds for a loan the government
agency funded through a government program. - }
' { + SECTION 11. + } { + Sections 3 to 9 of this 2009 Act
are repealed on January 2, 2014. + }
' { + SECTION 12. + } { + The amendments to ORS 86.740 by
section 10 of this 2009 Act become operative on January 2,
2014. + }
' { + SECTION 13. + } { + This 2009 Act being necessary for
the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2009 Act
takes effect on its passage. + } ' .
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